Lessons From Cuyahoga County On Land Banking

Cuyahoga Land Bank President Gus Frangos speaks at the NEON Veteran Housing Program Launch in June.

Cuyahoga Land Bank
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Since its creation in 2009, the Cuyahoga Land Bank has been a successful model for the Ohio land banking process, bringing in a hundred vacant properties a month.

Gus Frangos, president and general counsel of the land bank, joined Essential Pittsburgh’s Paul Guggemheimer to explain Cuyahoga’s success and how other counties can learn from it.

If you don't have money, then it's a paper tiger. - Gus Frangos

The bank began in 2008 as Cleveland struggled through the worst of its foreclosure crisis, which at the time was spreading out from urban neighborhoods. Cuyahoga -- already frought with bureaucracy -- became the center of the crisis, he said. A land bank is a publicly created entity whose sole purpose is to acquire vacant, blighted, and abandoned land and clear old tax liens off of it

“We felt that, often times that what is good about government is also bad about government,” Frangos said. “Simply because the shackles that come (it) ... and the time and the bureaucracy it takes to transact a property is often times counterproductive.”

To stymie that, organizers created a three-tier process that first established the bank as a separate, non-governmental entity; then overhauled the area's foreclosure law; and eventually funded itself without taxpayer support.

While many land banks are either quasi- or fully governmental, Cuyahoga took another tack and reformed its laws. Foreclosed properties were automatically turned over to the bank, rather than putting them up for sale for speculators to buy.

But Frangos' third "engine" proved a bit more complicated than the others.

“If you don’t have any money, then it’s a paper tiger,” Frangos said.

Everyone wanted to solve the problem, but no one wanted to commit tax dollars for it, he said.

In the end, Frangos found a “palatable” idea by having the bank collect a percentage of the penalty and interest collected delinquent taxes already being collected.

“So, in this way, we can look at all of our taxing districts in Cuyahoga County -- I think there’s 103 of them. We can look at them in the eye and say with a straight face and very deliberately that we are not taking one red cent of actual tax dollars,” Frangos said.

Despite the bank’s successes, Frangos said they're just getting started. Even taking in 100 vacant properties a month, there are still many, many more to go.

“We’d like to be like Dorothy and click (our) heels and say ‘OK, in three years we’re gonna be done with this and be able to do something else,’’ Frangos said. “But (the volume of vacant properties) is going to be another problem that we deal with for another decade.”

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Vacant properties in Pittsburgh are increasingly becoming more abundant, driving property values down and costing tax payers nearly $400,000 a year. Liz Hersh, Executive Director of the Housing Alliance of Pennsylvania says that although there are 16,000 to 20,000 vacant properties in Pittsburgh, blight in Pennsylvania is not just an urban issue.

“Because we’re an old state, we’ve had a lot of changes in industry, and we’ve had a lot of population loss over the years, and a lack of reinvestment, and a lack of policy to encourage or incentivize reuse of old properties,” Hersh explains.